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March 03, 2022 The Tax Lawyer

Corporate Tax Integration: Past, Present, and Future

Vol. 75, No. 2 - Winter 2022

by Christopher H. Hanna


For many years, tax scholars have advocated, and policymakers have considered, integrating the two levels of tax on corporate earnings—a tax imposed once at the corporate level and a second time at the shareholder level. The resulting integration—a single level of tax on corporate earnings—would be a business tax system achieving greater equity and efficiency in taxing corporate earnings. For much of the time, however, corporate America has opposed, or at best been lukewarm to, the idea of corporate tax integration. In addition, policymakers have been hesitant to fully support corporate integration.

This Article discusses how to obtain the support of corporate America and policymakers and addresses a gap in existing proposals and the academic literature. The key for corporate America is financial accounting and addressing corporate America’s near obsession with the interaction between financial accounting and the tax laws. For policymakers, the keys are economic growth, capital investment, and the labor force. By addressing the concerns of corporate America and policymakers, this Article proposes a business tax system that could garner the support of tax scholars, policymakers, and corporate America, all without sacrificing revenue.

Read the full article or download the complete issue.